Bajaj Auto 2010

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Presented By:

Ashutosh Gautam

PGDM-IB

IB091104

ANALYSIS OF

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Founder Jamnala Bajaj

Year Of Establishment 1926

Key People Rahul Bajaj(Chairman)

Madhur Bajaj (Vice-Chairman)

Rajiv Bajaj(Managing Director)

Industry Automobile-Two & three Wheelers

Business Group The Bajaj Group

Presence Distribution network covers 50 countries.

Dominant presence in Sri- Lanka, Columbia,

Guatemala, Peru ,Egypt, Iran and Indonesia

Joint Venture Kawasaki Heavy Industries of Japan, Nissan,

Renault

Rehistered & Head Office Akurdi

Pune-411035

india

Employees 13000

Net income 8,671.16cr(2008-09)

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HISTORY

The company was the world's fourth largest manufacturer of

two-wheelers, behind Japan's Honda, Suzuki, and Kawasaki

Bajaj Auto ltd is the flagship company of the Bajaj group.

Founded in 1926 by Jamnalal Bajaj, founder of the group. The present Chairman of the group, Rahul Bajaj, took charge

of the business in 1965

Bajaj entered into a strategic tie-up with Kawasaki in late

1990s to enhance its product line and knowledge up-gradation

By 1997, Bajaj faced tough competition in the domestic

market and its market share stood at 40.5%. Under the

leadership of Rahul Bajaj, the turnover of Bajaj Auto has

gone up from Rs.72 million to Rs.46.16 billion

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MISSION AND VISION STATEMENT

VISION To attain World Class Excellency by demonstrating Value added Products

to customers

MISSION

Focus on value based manufacturing Continual Improvement

Total elimination of wastes

Pollution free & safe environment

OBJECTIVE

Bajaj Limited is to cater the market needs of transportation by providing 2wheeler and 3 wheeler vehicles.

BAL has been producing the catalogue products to cater to the changingmarket requirements. Based on the customer feedback, improvements arebeing made continuously in the existing products.

GOAL

To catapult Bajaj Auto as the countrys largest automobile company

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THE FALL OF AN ICON

HAMARA BAJAJ

Ad campaign helped Bajaj position CHETAK:

A geared model-scooter occupying near iconic

status. In January 2006, BAL announced that it had

stopped production of Chetak. With thisannouncement, BAL closed a major chapter in

its history. Mr.Rajiv said that it was a history hewould like to forget. His company has lived toolong on nostalgia... holding on to anything fromthe past is a sign of weakness

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"Like Volkswagen Beetle, the product (Bajaj Chetak) had lost its relevance."

"W e believe it is not good enough to be better, it is

important to be distinct.

This Lead to the strategy of

DISTINCTLY AHEAD

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HAMARA

BAJAJ

INSPIRING

CONFIDENCE

DISTINCTLY

AHEAD

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Internal Factors - Strengths &

Weaknesses

Strengths:

Highly experienced management.

Product design and development capabilities.

Extensive R & D focus.

Widespread distribution network.

High performance products across all categories.

Great financial support network (For financingthe automobile)

High economies of scale.

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Weaknesses:

Hasn't employed the excess cash for long.

Still has no established brand to match HeroHonda's Splendor in commuter segment.

Not a global player in spite of huge volumes.

Not a globally recognizable brand (unlike thepartner Kawasaki)

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Opportunities

The growing gearless trendy scooters andscooterette market.

Can use the existing R&D capabilities for newmodels.

Can invest and grow the life style segments.

Double-digit growth in two-wheeler market.

Untapped market above 180 cc in motorcycles. More maturity and movement towards higher-

end motorcycles

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Threats

The competition catches- up any new

innovation in no time. Threat of cheap imported motorcycles from

China.

Tough competition faced by foreign as well asdomestic players.

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Two Wheeler Industry: An Overview

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Market Segmentation

The high performance segment

The 125 cc segment

The 100 cc segment

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Buyer's Bargaining Power:

Buyers in automobile market have more choice tochoose from and the increasing competition isdriving the bargaining power of customers uphill.With more models to choose from in almost allcategories, the market forces have empowered

the buyers to a large extent.Industry Rivalry:

The industry rivalry is extremely high with anyproduct being matched in a few months by

competitor. This instinct of the industry isprimarily driven by the technical capabilitiesacquired over years of gestation under thetechnical collaboration with international players.

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Substitutes:There is no perfect substitute to this industry.Also, if there is any substitute to a two-

wheeler, Bajaj has presence in it. Cars, whichagain are a mode of transport, do neverdirectly compete or come in considerationwhile selecting a two-wheeler, cycles do never

even compete with the low entry level mopedfor even this choice comes at a comparativelyhigher economic potential.

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CORE COMPETENCIES

Bajaj Auto is one of the oldest and the second largesttwo wheeler manufacutrer in India.

Mr Bajaj said that any company, which wants to

survive, must have quality and service orientation. With the introduction of DTS-i and DTS-Fi technology,

Bajaj Auto Limited has led the way in pioneeringtechnology along with style.

The Profitability Pyramid in Exhibit 4 shows that themargin is very low in the sub-125cc segment butvolumes are high. BAL wants to shift users from 100,115cc segment to 125cc and higher

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150cc

125cc

30%

100cc

40%

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SUPPLY CHAIN MANAGEMENT

Vendors

Bajaj Auto has a consolidated base of 180 vendorssupplying components to all Bajaj Autos plants.

A large number of vendors are located either nearPune or Aurangabad.

Around 60% by value of Bajaj vehicle is outsourced.Virtually no components are imported & 70% of BajajAutos requirements are sourced from within the state

of Maharashtra Bajaj Auto has also begun actively assisting its suppliers

in finalizing joint ventures with counterparts in Japan,Italy, Taiwan & Spain.

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Key suppliers:

Bajaj auto has approximately 198 suppliers for their raw materials.Some of the key suppliers are:-JBM -Frames

MRF & Dunlop tires

Minda - Locks & ignition system Reinder headlamps & lights

Endurance brakes, clutch & Cast wheel

Varroc Plastic parts & Digital Meter

Max auto components ignition system and switches

Silco cable wires and cables

Makino industry Brake shoes . Brake lining, clutch center

Dealers

Bajaj Auto has a network of 422 dealers and over 1,300authorized service centers

The company plans to increase the number of dealers to 500 bythis financial year

During the financial year 2007-08, the company extended BASS(Bajaj Auto Service Standard) to standardize the workshops of 250 dealers & 50 authorized service centers.

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Manufacturing locations

Akurdi, Pune

This is one of the oldest plant of bajaj auto ltd with production capacity of 0.6 million vehicles/ year.

The plant has been closed in order to equip for four wheeler production

Bajaj Nagar, Waluj Aurangabad

This is second plant with production capacity of 0.86 million/ year.

Products manufactured here are Kristal, XCD and platina and commerial GCseries

Chakan Industrial Area, Chakan , Pune

This is the biggest plant of bajaj auto Production Capacity of 1.2 million/year .

Product manufactured here are pulsar and avenger and commercial Geseries

Pantnagar , Uttarakhand

The most advanced plant of bajaj auto .

It has Capacity of 0.9 million vehicles per year , product manufactured hereare platina and XCD.

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GLOBAL BAJAJ

Bajaj is present in over 50 countries all over the globe

Dominant presence in Africa, Latin America and SouthAsia with increasing market share every year

891,002 units exported in 2009-10, an increase of over15 % over the previous year

Total motorcycle exports of 726,115 in 2009-10, growthof 15% over 2008-09

Largest exporter of three wheeled commercial vehiclesin the world: 164,887 units exported in 2009-10, a riseof 19% over 2008-09

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Recent News on Bajaj Auto

Bajaj-Renault-Nissan to drive small car (ULC)

Bajaj Auto Ltd has announced that thecompany may launch a small car in the year

2012 in India.

The Discover has now been positioned tofulfill the former need in a segment where

Hero Honda reigns supreme while the Pulsarhas established itself in the sporty slot, withmonthly sales of over 40,000 units.

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Bajaj Auto 2010